S&P: Mothers Work outlook stable

Standard & Poor's said it changed its outlook on Mothers Work Inc. to stable from positive and affirmed the B corporate credit rating. The issuer's $90 million senior secured term loan is rated B+ with a recovery rating of 2.

The outlook change is based on recent operating difficulties due in part to increased competitive pressures, the agency said.

The ratings reflect the company's leveraged capital structure, history of inconsistent operating results and high business risk associated with the narrowly defined and intensely competitive maternity retail industry, S&P said.

Despite mixed operating performance, Mothers Work has continued to improve credit protection measures because of higher EBITDA and debt reduction, the agency said. The company's total debt-to-EBITDA ratio declined to about 4.6 times for the 12-month period ended June 30 from about 6.2 times for the comparable period in 2006, S&P said.

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